A recent High Court decision suggests that we may see more pushback from HMRC on disclosure applications.
In Refinitiv Ltd UK Holdings Ltd and another v HMRC [2023] UKFTT 222 (TC) (reported in Tax Journal, 17 March 2023), Refinitiv brought a claim for judicial review on the basis that HMRC had abused its powers in issuing diverted profits tax (DPT) charging notices because it went against an advance pricing agreement (APA) setting an arm’s length price for certain services. HMRC initially had two grounds of resistance, but dropped one after permission was granted. Refinitiv wanted to know why and applied for disclosure of documents informing their decision-making in issuing the notices.
In denying the application, the High Court reiterated that:
The extent of the duty of candour depends on the issues in the case. There is no duty on HMRC to disclose everything about its decision-making process.
The question is whether disclosure is necessary for the fair and just disposal of the issues.
In this case, the claim related to a legal issue, i.e. the interpretation of how the APA and DPT regimes interact. The court may have taken a different view if Refinitiv had raised a public law challenge to HMRC’s decision-making process. An enquiry into why HMRC had dropped one of its arguments was not warranted.
Interestingly, this decision was not published originally. HMRC applied to have it published because it gave ‘guidance on the duty of candour and how the duty to disclose documents is circumscribed by the nature of the case’, and said they would seek to rely on it in an unrelated FTT case. It looks like we should expect pushback on any future disclosure applications, both in judicial review claims and tribunal appeals.
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Refinitiv and disclosure applications
A recent High Court decision suggests that we may see more pushback from HMRC on disclosure applications.
In Refinitiv Ltd UK Holdings Ltd and another v HMRC [2023] UKFTT 222 (TC) (reported in Tax Journal, 17 March 2023), Refinitiv brought a claim for judicial review on the basis that HMRC had abused its powers in issuing diverted profits tax (DPT) charging notices because it went against an advance pricing agreement (APA) setting an arm’s length price for certain services. HMRC initially had two grounds of resistance, but dropped one after permission was granted. Refinitiv wanted to know why and applied for disclosure of documents informing their decision-making in issuing the notices.
In denying the application, the High Court reiterated that:
The extent of the duty of candour depends on the issues in the case. There is no duty on HMRC to disclose everything about its decision-making process.
The question is whether disclosure is necessary for the fair and just disposal of the issues.
In this case, the claim related to a legal issue, i.e. the interpretation of how the APA and DPT regimes interact. The court may have taken a different view if Refinitiv had raised a public law challenge to HMRC’s decision-making process. An enquiry into why HMRC had dropped one of its arguments was not warranted.
Interestingly, this decision was not published originally. HMRC applied to have it published because it gave ‘guidance on the duty of candour and how the duty to disclose documents is circumscribed by the nature of the case’, and said they would seek to rely on it in an unrelated FTT case. It looks like we should expect pushback on any future disclosure applications, both in judicial review claims and tribunal appeals.
